Pandora’s abandonment of mined diamonds has apparently not hindered its standing with younger consumers.
Speaking to the Financial Times (FT) Tuesday (May 7), Alexander Lacik, CEO of the mass-market jeweler, said younger buyers helped fuel a boom in lab-grown stones that had led to a decline in sales of mined diamonds, and helped the company best its luxury rivals.
Lab-grown diamonds are opening up the industry to new consumers, he said, as these stones are usually about a third of the cost of the alternative.
“People are discovering that a diamond is a diamond. It’s a different value proposition, and people are voting with their wallets,” Lacik told the FT. “Older customers are more wedded to mined diamonds. Younger ones are more open to lab-grown.”
The report notes that Pandora became the first major jeweler to move to a lab-grown-diamond-only strategy in 2021 as it pushed to expand its offerings beyond the charm bracelets and necklaces for which it had been known.
The company nearly doubled its sales of lab-grown diamonds in the first quarter, increasing revenue by 87%, the FT said.
Gen Z’s embrace of lab-grown diamonds makes sense in light of PYMNTS Intelligence research showing that this age group — more so than other younger consumers — is most likely more likely to point to buying an expensive retail product as their main financial goal than to mention paying for an upcoming event or show.
“In fact, consumers in this group are seven times as likely to prioritize the former as the latter,” PYMNTS wrote last month.
By contrast, millennial and bridge millennial consumers were the most likely to list paying for an event or show as their top goal.
“By 2030, barely five years from now, Gen Z will represent a third of the workforce. Their disposable income is projected to increase by sevenfold and their spending by sixfold as their incomes rise and they begin to benefit from the $90 trillion transfer of wealth headed their way from parents and grandparents,” PYMNTS CEO Karen Webster wrote recently.
“For that reason, Gen Z is the generation that all businesses are courting — they are their future workers, customers, business partners and investors.”
At the same time, this age group is also struggling to make ends meet, with 59% of Gen Z consumers living paycheck to paycheck, despite half of them not paying rent or mortgage.
“With such a financial cushion, the question remains as to why these young adults struggle to live within their means,” PYMNTS wrote last month. “One answer: Gen Z consumers cite splurging on nonessential items as a top reason for their financial lifestyle.”
Source: pymnts.com